The Governor further said that Japan’s Central Bank is aware of the poor financial condition of the regional banks due to the poor monetary policy. But the governor pointed out that current shape of the yield curve is correct. It means that the Central Bank of Japan is in no mood for a rate hike shortly.

Haruhiko Kuroda said that he would take all the possible measures to achieve the inflation goal of 2 percent. In the past, the central bank was not able to control the inflation through asset purchase program, and now the bank is targeting last year’s interest rates. The Central Bank of Japan is maintaining a negative interest rate of 0.1 percent and 10-year bond yield around 0 percent.

Jackie Marvella

Masayuki Kichikawa, the strategist from Sumitomo Mitsui Asset Management, commented on the statement made by the Governor by saying that he expects the Central Bank of Japan to get rid of negative interest rates in the first half of 2019.

The GDP growth of Japan in Quarter 3 rose up by 0.6% from the earlier estimated figure of 0.3 percent. It has triggered a recovery in Nikkei Index which closed at 22,811.08 on December 7, 2017. Yen has also turned weak due to the reversal of Nikkei index because the former shares are inversely proportional to the safe-haven asset. On the other hand, the upbeat capacity utilisation rate and robust housing data have made the Canadian Dollar turn bullish.

The CAD/JPY currency pair has bounced back the support level at 86.75 which is evident from the price chart below. The currency pair bullishness is further supported by rising stochastic oscillator. A bullish reversal in the currency pair is expected.

HIGH-RISK INVESTMENT WARNING: Trading Foreign Exchange (Forex) and Contracts for Differences (CFDs) is highly speculative, carries a high level of risk and is not suitable for every investor. You may incur a loss of some or all of your invested capital. Therefore, you should not trade with capital that you cannot afford to lose. You should be aware of all the risks involved in trading on margin.